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In addition, there was insider dealing at the stock exchange and the country's Ombudsman resigned over charges of personal corruption.
The real problem for the Social Democrats, though, was the state of the economy. With a background of rising inflation and slow economic growth, the government announced an austerity package in Januaiy 1990, which included a twoyear ban on strike action, and a wage, price and rent freeze strong measures which astounded most Swedes, used to living in a liberal, consensusstyle society. The Greens and Communists would have none of it and the Social Democrat government resigned a month later. Although the Social Democrats were soon back in charge of a minority government, having agreed to drop the most draconian measures of their programme, the problems didn't go away.
The General Election of 1991 merely confirmed that the model consensus had finally broken down. A fourparty centreright coalition came to power, led by Carl Bildt, which promised tax cuts and economic regeneration, but the recession sweeping western Europe didn't pass Sweden by Unemployment hit a postwar record and in autumn 1992 as the British pound and Italian lira collapsed on tne international money markets the krona came under severe pressure. Savage austerity measures did little to help: VAT on food was increased, statutory holiday allowances welfare budgets slashed, and after a period of intense currency speculation shortterm marginal interest rates raised to a staggering 500 percent.
In a final attempt to steady nerves, Prime Minister Bildt and the leader of the Social Democratic opposition, Ingvar Carlsson, made the astonishing announcement that they would ignore party lines and work together for the good of Sweden and then proceeded with drastic public expenditure cuts.
At the time of writing, there was still an unSwedish air of chaos in the country's political and economic affairs, and it's difficult to predict what will happen. A new election isn't due until 1994 and the current coalition is under severe strain; the Social Democrats, not unnaturally, attached conditions to their cooperation with the government (like reductions in defence spending]; while coalition partners like the Centre Party have threatened to withdraw if promised tax cuts don't go ahead.
As in Denmark, France and the UK, there is also a bitter internal debate about whether to sign up for full European Community membership, since the application to join was finally made in 1991. There are fears that increased European competition would further wreck the economy, and that EC membership would also mean having to join NATO and the Western European Union. This is something many Swedes are deeply unhappy about after 200 years of neutrality, despite the alarm that Russia could become more aggressive in future if Boris Yeltsin were to lose power to the clamorous rightwing nationalists currently opposing him.